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Microeconomics Chapter Summaries.docx

Microeconomics Chapter Summaries.docx - Chapter 1 Graphing...

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Chapter 1 Graphing Data A graph is made by plotting the values of two variables x and y at a point that corresponds to their values measured along the x-axis and y-axis. A scatter diagram is a graph that plots the values of two variables for a number of different values of each. A scatter diagram shows the relationship between the two variables. It shows whether they are positively related, negatively related or unrelated. Graphs Used in Economic Models Graphs are used to show relationships among variables in economic models. Relationships can be positive (an upward-sloping curve), negative (a downward-sloping curve, positive and then negative (have a maximum point), negative and then positive (have a minimum point), or unrelated (a horizontal or vertical curve). The Slope of a Relationship The slope of a relationship is calculated as the change in the value of the variable measured on the y-axis divided by the change in the value of the variable measured on the x-axis. A straight line has a constant slope. A curved line has a varying slope. To calculate the slope of a curved line, we calculate the slope at a point or across an arc.
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